Finance

The University of California is slated to price $1.5 billion in revenue bonds next week even as it battles Trump administration threats to research funding.

Federal Reserve Vice Chair for Supervision Michelle Bowman said she foresees three interest rate cuts for this year, a view bolstered by the latest employment data.

Issuance for the week of Aug. 11 remains elevated at an estimated at $10.713 billion, with $8.857 billion of negotiated deals and $1.857 billion of competitive deals on tap, according to LSEG.

"Nothing could delay a restructuring or a consensual deal [more] than the existing board was doing," said Assured Guaranty CEO Dominic Frederico of the Trump administration's removal of Puerto Rico oversight board members.

Hospital acquisitions, expansions and the anticipation of federal policy changes has increased bond issuance from the California Health Facilities Financing Authority.

While UST yields "consolidate" following Friday's massive rally after the July jobs report, muni yields remain resilient, according to Kim Olsan, senior fixed income portfolio manager at NewSquare Capital.

The municipal bond market is "doing pretty good for the moment," said Jeff Timlin, a managing partner at Sage Advisory.

The risk Brightline Florida poses to the rest of the high-yield market may manifest in fund flows, investors said.

Over the past three trading sessions, MMD yields have been bumped nine to 12 basis points, while UST yields have fallen over 20 basis points on the front of the curve.

Some bondholders have retained legal counsel while others are in the dark about the company's plans.

"If the narrative takes hold that the Fed is behind the eight ball and will need to cut rates several times in the coming months to catch up to the realities of a weaker economy, we expect muni yields will drift lower alongside treasuries," Birch Creek strategists said.

Municipal yields fell four to seven basis points, depending on the curve, while UST yields rallied nine to 30 basis points, with the largest gains on the front end.

Tax-exempt munis have underperformed year-to-date, said David Hammer, a managing director and portfolio manager at PIMCO.

The FOMC held rates steady at the conclusion of its meeting Wednesday and offered no hints regarding a September move.

The muni market has "cheapened and steepened," which is a great opportunity for people still on the sidelines to get into the market again, said Jennifer Johnston, director of municipal bonds research at Franklin Templeton.

School districts are facing many challenges, including less federal funding, increased competition, declining enrollment and inflating costs.

The asset class got a "much-needed boost" from inflows into muni mutual funds last week, said Birch Creek strategists.

The port, which operates Seattle-Tacoma International Airport, received a Moody's Ratings upgrade ahead of a $761 million revenue bond deal slated for next week.

Issuance for the week of July 28 is estimated at $11.035 billion, with $9.018 billion of negotiated deals and $2.017 billion of competitive deals on tap, according to LSEG.

Columbia College Chicago was lowered one notch to BB-plus from BBB-minus by S&P Global Ratings, citing the school's falling headcount and diminished demand.